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Letter To Senators Concerning The Economic Stimulus Package

November 9, 2001

Dear Senators:

The current economic downturn, which began before, but was exacerbated by, the events of September 11, is having a devastating and disproportionate impact on low-income workers, poor people and immigrants. On October 24, the House of Representatives passed - by an overwhelmingly partisan vote - its version of the economic stimulus package (H.R. 3090). This bill will not do nearly enough to bring us back to fiscal strength or to provide for the needs of low-income workers, who are the backbone of the American economy. The Reform Jewish Movement has repeatedly called upon the United States government to live up to its responsibility to ensure an adequate, federally guaranteed safety net to protect our nation's most vulnerable populations. The Torah teaches us to "open our hands to the poor and needy among us" (Deuteronomy 15:7). As you consider the Senate version of the economic stimulus package, we urge you to oppose H.R. 3090 and to support instead legislation which provides adequate funding to meet the growing need for social safety net programs.

H.R. 3090 ignores the needs of low-income workers, the sector of the workforce most disproportionately affected by the aftermath of September 11, and instead includes permanent reductions in the capital gains tax rate and the repeal of the corporate Alternative Minimum Tax (AMT). Federal Reserve Chairman Alan Greenspan, and others, have stated that permanent tax cuts are ineffective stimulus measures. H.R. 3090 also accelerates the planned tax rate reductions in the 28 percent tax bracket. Internal Revenue Service and Congressional Budget Office analyses show that fewer than one-quarter of taxpayers have incomes high enough to be in the 28 percent tax bracket or higher. Perhaps even more disturbing then is the news that Senator Charles Grassley's (R-IA) proposed economic stimulus package accelerates the tax rate reductions in the 28 percent, 31 percent, 36 percent, and 39.6 percent tax brackets. According to the Center on Budget and Policy Priorities, some 55 percent of these accelerated tax reductions would go to the wealthiest one percent of taxpayers, and this group is much more likely to save their money than spend it. Tax cuts only provide a stimulus to the economy when the dollars are spent.

The Center on Budget and Policy Priorities also finds that, while the majority of the bill focuses on tax cuts to corporations and wealthy individuals, less than 4 percent of H.R. 3090 goes toward spending and tax provisions for unemployed workers. Furthermore, rather than meeting urgent needs, the bill would not, in all likelihood, begin to provide any significant amounts of unemployment assistance for six months or more. The provisions releasing $9 billion in federal unemployment funds to states and giving states $3 billion block grants for new programs to provide health insurance to the unemployed are simply too little, too late.

We urge you to oppose H.R. 3090 and to work toward a bipartisan package that addresses the urgent and growing needs of low-income workers. Specifically, we believe that any effective economic stimulus package must include provisions which adequately address the increased need for both unemployment insurance and health insurance, and must not include permanent tax cuts to corporations or an acceleration of tax rebates to wealthy individuals. Stimulus package provisions must strengthen and expand social safety net programs such as the Food Stamp Program and WIC. Likewise, federal legislation must help states compensate for large losses in revenue that may result in cuts to critical state-level social service programs as well as tax increases on both the state and local levels.

Jewish tradition teaches us to "speak up, judge righteously, champion the poor and the needy" (Proverbs 31:9). Now, more than ever, our lawmakers must look out for the most vulnerable members of society. We look forward to working with you to shape an economic stimulus package that pays attention to the sector of the population most disproportionately affected by the aftermath of September 11.

Respectfully,

/s/
Judge David Davidson
Chair, Commission on Social Action


/s/
Mark J. Pelavin
Associate Director, Religious Action Center of Reform Judaism



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